What is a Baugemeinschaft – Property Development Cooperative

Building together as a community

In a property development cooperative (or building association), you join together with several households who want to build and purchase a plot of land together in order to construct houses or flats on it.
pro.b (www.pro-b-gruppe.de) has been supporting property development cooperatives for more than 20 years.

The property for the Nestbau³ property development cooperative project was acquired by pro.b at the end of 2021 with financing from UmweltBank in Nuremberg. Anyone interested in building now would join the already existing owners’ and property developers’ association Baugemeinschaft Nestbau³ Nord GbR.

How to become a homeowner in today’s world

Participation in a property development cooperative is a new way to own your own home and a successfully established alternative to the traditional rout of buying a condominium from a property developer. Building together as a community offers the following advantages:

  • Individual design options (depending on construction progress and time of joining)
  • Cost savings (you do not pay a property developer’s profit, but only the actual costs incurred)
  • Cost transparency
  • A voice in the design of your individual flat environment
  • your own flat
  • the inner courtyards
  • the materials, etc.

Advantages and disadvantages of a property development cooperative

Advantages include a familiar neighbourhood
During the planning phase, frequent interactions at (not only) the meetings leads to a robust social structure. You will know your neighbours before you have moved in.

The way that pro.b supports this process includes organising the ground-breaking ceremony, laying the foundation stone, the topping-out ceremony, and the first courtyard party after completion.

Cultivating a proactive approach and problem-solving abilities during the construction phase ensures amicable resolution of ongoing issues, leading to a more cohesive and well-functioning residential community. This fosters a stronger sense of identification with both the building and the neighbourhood.

Significant cost savings and transparency
Construction as part of a property development cooperative is a more cost-effective alternative to buying a home from a traditional property developer. The property development cooperative only builds for its own needs. The otherwise usual risk surcharges and profit margins do not apply. Possible additional costs for special requests and different design options are communicated transparently to the members. Compliance with the target costs has the highest priority in all pro.b projects. Cost increases arising during the construction process are communicated at an early stage by means of regular cost reports.

Risks and side effects of a property development cooperative

Despite all the enthusiasm for the clear advantages of a property development cooperative, you should also be aware of the risks before joining:

Within the property development cooperative, you yourself become the property developer. Besides simply purchasing a property from a property developer, this entails further responsibilities. For example, the property development cooperative bears the risk of cost increases in the event of a changing cost situation during the construction phase. You as the property developer also bear the risk of non-occupancy. This means that the building must continue to be built in its entirety, even if not all flats are occupied. The costs incurred in the process must be pre-financed by the property development cooperative.

The social risk should not be underestimated either. If the ‘wrong’ partners are taken on, they can paralyse the entire property development cooperative or even block some decisions altogether. Therefore, be careful when choosing a partner!

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